​Falling GBP/USD Expected amid Ambiguous UK-EU Talks

WikiFX News (31 Oct.) - Recently, EU chief negotiator Michel Barnier decided to extend his stay on London to facilitate post-Brexit trade talks with Britain. The upbeat sentiment lifted thereby allows the pound to embrace upsides. In the long term, however, GBP/USD is expected to edge lower amid the second wave of the pandemic across EU and the U.S. as well as the uncertain UK-EU talks.

There are less than 100 days left until the transition period comes to an end on 31 December 31. Despite the parties' high hopes of an eventual deal, the UK and Europe are unlikely to reach any agreement before the US election on next Tuesday. In the long run, the UKs weak economy can hardly changed even the trade deal is achieved.

In addition, the Bank of England may do more monetary easing in the future to bolster the countrys economy, considering the national coronavirus lockdown. Moreover, the haven-linked US dollar has taken choppy advance recently, further weighing on the pound.

GBP/USD lately hovered around 1.30 but may breach the support at 1.30 in future trading as its price has been gaining bearish strength since late September.

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Chart: Trend of GBP/USD